Rebecca Roffe is a partner and Chris Devitt an associate at law firm CMS
The revised National Planning Policy Framework (NPPF) emphasises the government’s commitment to economic growth through building. Key to this growth are proposals for a modern tech-focused economy, and nowhere is this more relevant than in the hot topic of data centres.
The increasing demand for data storage solutions has led to data centres being classified as Critical National Infrastructure (CNI). The prime minister’s speech in January unveiled the government’s AI Opportunity Action Plan, which aims to “move fast and take action to win the global race” on AI. Crucially for the construction industry, the plan introduces AI Growth Zones (AIGZs) – areas with enhanced planning powers, designed to accelerate the build-out of AI infrastructure. With this added certainty and speed of procurement for data centres, contractors should soon find an increased pipeline of new projects out for tender.
“There is now an unambiguous expectation that local plans will include provisions driving the development of data centres forward”
The revised NPPF supports this intention. It says that planning policies should facilitate developments to meet the needs of a modern economy, including identifying suitable locations for data centres, gigafactories, digital infrastructure, and logistics. The plan sets out the blueprint for the new or upgraded facilities and infrastructure that will be needed to support industry growth.
For a construction industry looking at ways to attract the best talent to work on cutting-edge projects, the fresh backing for data centre projects provides two particular benefits: to bring in experienced workers with the lure of potentially profitable projects, and the confidence in future work to train up a younger generation of workers in the needs of data centre construction. Both will be crucial in alleviating the shortage of experienced staff that is a live issue for the construction industry.
Local push
Industry will have noted that the NPPF’s proposed changes included implementing a positive expectation that suitable sites for digital infrastructure projects should be identified by local authorities and be supported in decision making. The government has also consulted on data centre developments being part of the Nationally Significant Infrastructure Project (NSIP) regime. Inclusion within this regime would allow applications for data centres to be assessed and decided centrally by the Planning Inspectorate and the secretary of state, rather than at the local level.
There is now an unambiguous expectation that local plans will include provisions driving the development of data centres forward, although it remains to be seen how effectively local planning authorities will adhere to this.
The NPPF is always the realm in which politics and planning meet. Governments can rapidly make changes to the NPPF and are often keen to use it as an opportunity to set out their administration’s policy intent at an early stage.
Labour is clearly keen to be seen as the growth administration. Time (and future planning applications) will tell how effective, and popular, this will prove to be. However, including explicit provisions for data centres in the NPPF and making provisions for data centre developments to fall within the NSIP regime are surely both positive moves for data centre developers, and should further remove barriers for their development.
The incorporation of AIGZs is an interesting development, with the government looking to trial the first of these at Culham, the headquarters of the UK Atomic Energy Authority, which is seeking a private sector partner to develop one of the UK’s largest AI data centres with plans to scale up to 500MW. If this public/private model is a sign of things to come, it could supercharge the sector.
The revised NPPF represents a significant step forward in the UK’s efforts to support data centres, giving developers and contractors a vital role to play in supporting the country’s strategic economic growth. There is a distance yet to travel before spades are in the ground but the prospects for the industry have rarely looked so promising.
